Hanai v. Mercedes-Benz USA, LLC

Background

Martin Hanai and Shigeru Hanai purchased a new 2018 Mercedes-Benz GLE 350 from a Mercedes-Benz dealership in San Francisco. Mercedes-Benz USA, LLC manufactured the vehicle. The plaintiffs took the vehicle to authorized repair facilities twice because of a foul odor from the air conditioner, but the odor continued. Mercedes-Benz did not replace the vehicle or provide restitution.

The plaintiffs initially asserted three claims in state court: breach of express warranty under the Song-Beverly Act, breach of implied warranty under that Act, and fraudulent concealment. Mercedes-Benz removed the case to federal court based on diversity jurisdiction. The court later granted Mercedes-Benz’s motion to dismiss the fraudulent-concealment claim and the related punitive-damages claim.

The parties then settled. Mercedes-Benz agreed to repurchase the vehicle for $67,913.01 and to pay attorney’s fees, costs, and expenses reasonably incurred “to date.” The settlement also stated that the plaintiffs were the prevailing party for purposes of a fee motion. After the parties filed a joint notice voluntarily dismissing the case, the plaintiffs requested $29,147.50 in attorney’s fees and $862.70 in costs.

Fee Analysis

Applying California law, the court used the lodestar method, which calculates fees by multiplying reasonable hours by reasonable hourly rates. The court found that the requested hourly rates were slightly higher than prevailing rates for similar work but approved rates of $525 for David Barry, $250 for Logan Pascal, and $350 for Otis Hayes III. The court did not approve the higher rates requested for work performed after January 2022.

The court agreed with Mercedes-Benz that the settlement agreement limited fee recovery to work performed through the settlement date, August 31, 2021. It therefore excluded $5,010 in fees and costs incurred after that date, including time spent preparing the fee application.

The court also excluded $4,602.50 for work on the fraudulent-concealment claim. It reasoned that fees for fraud work were not recoverable, that the fraud claim had previously been found unsupported and was dismissed on the pleadings, and that the fraud issues were sufficiently separate from the warranty claims to allow allocation.

The court excluded $600 billed for preparing an unfiled motion to remand because preparing and not filing the motion was inefficient; the plaintiffs also withdrew that time in their reply. Finally, the court made additional reductions totaling $2,030 for billing entries it found excessive, inefficient, or duplicative, including entries concerning meet-and-confer communications, scheduling matters, an informal discovery dispute statement, and repeated file reviews.

Disposition

The court considered Mercedes-Benz’s objections to statements in David Barry’s declaration and overruled them to the extent they concerned evidence addressed in the analysis.

The court granted in part and denied in part the plaintiffs’ motion for attorney’s fees. It awarded $16,905 in attorney’s fees and $862.70 in costs under Local Rule 54-3(a).